The mental meanderings of a dedicated amateur investor and speculator.

Thursday, September 25, 2014

Trickle Down

Trickle down economics doesn't work. But the worlds central banks insist on giving money to the big banks in the hope they will loan it out. Banks are in business to make money. They are not in the business of giving people jobs, or helping an economy grow. Unless they can make money on the loans they make. And loans mean more debt for the debtors.

Politics being what it is around the world, with the Tea Party mentality that has been promoted by the right wing capitalists it is politically impossible to just give the money to those at the bottom of an economy. So why we can't just take these trillions of moneys and build roads and bridges and improve our parks and our common areas is beyond me. That would be an investment in the nations peoples. And they would spend the money, and then perhaps they would take out that home loan.

But we can't do that! That would be more government debt!!! And all of those people put to work would pay taxes and the loans that banks made to those same people with jobs would expand the money supply. But NO, we can't do that!

So, the slightest hint that a central bank is set to pull back on the cheap money causes the financial assets that were artificially inflated to collapse. And we are back where we started.

About Me

I am married to a wonderful woman, have an equally wonderful daughter and two grandaughters.
My passion for the last 15 years has been speculating is the financial markets. I got started when that great salesman, Ken Roberts hooked me on commodity trading. After running my first trading account into the ground in short order using his techniques, I set about learning how to do the exact opposite. The next futures trading account lasted longer, but went bust also. I didn't realize at the time that I was trying the toughest game around. The learning curve was steep, but it was probably a cheap education. I watched the markets daily, trying to manage my 401K, with mixed success. After a few years, during which I built my own home, I got together a trading account. A couple up and down years and then things started to "click".
Trading is mostly psychological. Fighting against your own instincts. But I have learned to trust myself. I keep an eye on the macro picture while I trade the short term. This blog will be mostly macro observations but I may fall victim to the impulse to point out some trades, if they seem instructive.